1. Insider | March 2014
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Workers Still Uneasy About Financial
Security and Retirement
Results from Towers Watson’s 2013/2014 Global Benefit Attitudes Survey
By Jonathan Gardner and Steve Nyce1
In the more than five years since the
financial crisis, equity markets have climbed
to historic highs and the housing market
has rebounded. Nevertheless, persistent
unemployment and stagnant wages have
sapped economic momentum and
undermined workers’ financial security and
retirement confidence.
Throughout this period Towers Watson has been
tracking workers’ attitudes toward their jobs and
benefits to better understand their financial concerns
and plans for the future. While employees seem more
satisfied with their finances now than they were in
2008 and 2009, retirement confidence remains
below precrisis levels, and many are worried about
the affordability of health care. Significant numbers
of workers have had to cut back on spending and
plan to delay retirement, many until age 70 or later.
About the survey
Towers Watson’s 2013/2014 Global Benefit
Attitudes Survey is a nationally representative survey
fielded in 12 countries.2
The U.S. survey includes
5,070 respondents employed by nongovernment
organizations with 1,000 or more employees. It
builds on several previous Towers Watson surveys to
track evolving employee attitudes.
This article reflects responses from a subset of
4,248 retirement plan participants working full-time.
All respondents are provided a defined benefit (DB)
and/or defined contribution (DC) retirement plan by
their current employer. DB plan participants are
those who currently participate in an active DB plan.
Respondents with only a DC plan include both those
who contribute to the plan and those who decline to
participate. All results are weighted by age, gender
and salary to the national average of similar workers.3
This is the first in a series of three articles based on
the survey. The second article will examine the value
employees assign to various benefits and features,
and the third article will highlight how employer-
sponsored benefits affect attraction and retention.
Employees more satisfied but still
worried about the future
Despite improving corporate financial performance,
more than three-quarters of employees (76%) say
their employer recently enacted significant changes
that could compromise their near-term or long-term
finances (Figure 1). These changes commonly affect
retirement benefits, pay raises and employees’ shares
of health care costs, and are putting pressure on
workers’ household budgets.
As the economy has recovered, employees’
satisfaction with their overall finances has rebounded
as well, rising from 26% in 2009 to 46% in 2013
(Figure 2). While the gains accrue across the board,
retirement plan type and health status strongly affect
1
The authors would like to thank Charlene LeBlanc, Billie Jean Miller and Koki Mori for their support in developing this research.
2
Countries include Australia, Brazil, Canada, Chile, China, Germany, India, Japan, Mexico, Netherlands, the United Kingdom and the United States.
3
The margin of error is +/- 1.38% for the total sample.
Figure 1. Has your employer done any of the following in the last two years?
Conducted layoffs 47%
Significantly increased health care premiums or out-of-pocket costs 38%
Reduced pay increases 32%
Cut or significantly changed retirement benefits 24%
Reduced hours 21%
Undergone a merger/acquisition or other major restructuring 18%
Implemented at least one of the above changes 76%
Note: Based on full-time employees enrolled in a retirement plan.
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
Figure 2. Thinking of all aspects of my finances, I am satisfied with my
situation today
2009 2010 2011 2013
Percentage
point change
2009 – 2013
All 26% 33% 41% 46% +20
Age
Younger than 40 28% 42% 47% 44% +16
40 – 49 22% 29% 39% 45% +23
Age 50+ 24% 32% 33% 47% +23
Plan type
DB plan 29% 40% 49% 58% +29
DC plan only 25% 27% 31% 43% +18
Health status
Very good 33% 43% 51% 54% +21
Good 24% 27% 34% 37% +13
Fair or worse 12% 18% 26% 27% +15
Note: Based on full-time employees enrolled in a retirement plan. Percentages indicate responses of “agree” or
“strongly agree.”
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
““While the gains accrue
across the board, retirement
plan type and health status
strongly affect satisfaction
levels.”

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Insider | March 2014
satisfaction levels. Participants in DB plans are 35%
more likely to be satisfied with their finances than
those with only a DC plan, and healthy workers are
twice as likely to be content as those in poor health.
Roughly half of employees remain unsatisfied with
their finances and almost three in five are worried
about their financial future (Figure 3). Workers who
are less healthy and those who lack DB plans are
both less satisfied with their current finances and
more worried about the future. This might reflect both
adverse changes in the workplace and broader
economic uncertainties.
Retirement confidence still trails
precrisis levels
Retirement confidence climbed between 2009 and
2013, and nearly one-quarter of employees are now
“very confident” of having enough income for the
first 15 years of retirement (Figure 4). This reflects
improving financial conditions over the past four
years as employees have rebuilt their savings. When
asked to assess their prospects 25 years after
retiring, however, only 8% remain confident of a
financially comfortable retirement. The impact of the
shift from DB to DC plans might be feeding through
to financial worries about the future as employees
prepare to bear more risk. Given increasing longevity,
this gives cause for concern.
Just as DB plan participants are more confident of
their financial futures, they are also considerably more
secure about their retirement income adequacy than
DC-only employees in both the short and long term.
Employees nearing the end of their careers are less
optimistic about retirement and might have more
realistic expectations than workers overall. The
financial crisis hit this group particularly hard, with
the stock market fall putting a huge dent in their
retirement savings. Since the start of the financial
crisis, confidence levels for workers age 50 and older
have declined by 10 percentage points (Figure 5). In
2007, 34% were very confident of their ability to
afford the first 15 years of retirement, compared with
only 24% in 2013.
Figure 3. I often worry about my current (or future) financial state
0% 10% 20% 30% 40% 50% 60% 70% 80%
Fair or worse
Good
Very good
Health status
DC plan only
DB plan
Plan type
Age 50+
Age 40 – 49
Younger than 40
Age
All respondents
4747 5858
4343 5454
5252 6060
4646 5858
3838 5151
4949 5959
4242 5252
5252 6363
6666 7272
I Current finanical state I Future financial state
Note: Based on full-time employees enrolled in a retirement plan. Percentages indicate responses of “agree” or
“strongly agree.”
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
Figure 4. Confidence by retirement plan type, 15 and 25 years into retirement
Years into
retirement Plan type 2009 2010 2011 2013
Percentage
point change
2009 – 2013
15 years Overall 18% 21% 25% 23% +5
DB plan 26% 29% 39% 35% +9
DC plan only 14% 17% 18% 20% +6
25 years Overall 8% 9% 14% 8% 0
DB plan 9% 14% 23% 11% +2
DC plan only 7% 6% 9% 7% 0
Note: Based on full-time employees enrolled in a retirement plan. Percentages indicate responses of “very confident.”
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
Figure 5. Older workers’ (age 50+) confidence in having enough resources 15
years into retirement
2007 2009 2010 2011 2013
Percentage
point change
2007 – 2013
Not at all confident 9% 15% 12% 10% 13% +4
Not too confident 15% 21% 24% 23% 19% +4
Somewhat confident 42% 46% 40% 41% 43% +1
Very confident 34% 18% 24% 27% 24% –10
Note: Based on full-time employees enrolled in a retirement plan. Numbers for 2007 based on T. Hill (2008), Watson
Wyatt’s 2007 U.S. Surveys of Older Employees’ and Retirees’ Attitudes Toward Lump-Sum and Annuity Distributions From
Retirement Plans.
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
““DB plan participants are
considerably more secure
about their retirement income
adequacy than DC-only
employees.”

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Insider | March 2014
Pessimistic outlook on public programs
and medical costs has workers worried
Economic progress seems to have fallen off course,
and only 34% of employees expect to be better off
in retirement than their parents. In addition to
curtailments to workers’ private retirement plans, the
public safety nets their parents and grandparents
relied on are looking more precarious as well.
Eighty-three percent of employees believe Social
Security will be less valuable in the future and 88%
have similar fears about Medicare. The pessimistic
outlook for Social Security and Medicare likely
reflects heightened concerns about government
gridlock and the national debt. Employees know that
weaker public finances and less generous employer
benefits will impose a far greater retirement burden
on individuals.
Workers also worry about both current and long-term
health care costs. Only two in five employees believe
they can afford any medical expenses that might arise
in the next 12 months. These concerns are more
pronounced for midcareer and older employees and
those in poor health. Additionally, 70% of employees
fear higher out-of-pocket medical costs lie ahead.
Escalating health care costs are already claiming
larger shares of paychecks, and confidence in the
affordability of health care further erodes when
workers look ahead to retirement. Roughly half of all
employees expect to be able to afford the health
care they will need after retiring (Figure 6). Again,
older workers, those in poor health and under-savers
are particularly worried, and 80% of those who
characterize themselves as “highly stressed” are
apprehensive about future medical costs.
Although DB plan participants look forward to a more
financially secure retirement, they are not immune
from these worries (Figure 6). While this group is
moderately more confident of their ability to afford
their medical expenses in retirement, roughly half of
DB plan participants (45%) are afraid their retirement
plan might be cut and about one-third (36%) fear
having to bear more investment risk in the future (not
reflected in Figure 6). And for DB plan participants
who have recently undergone a cut to their retirement
program, 70% fear more curtailments are on the
horizon.
Figure 6. I am concerned I will not be able to afford my medical expenses when
I retire
0% 10% 20% 30% 40% 50% 60% 70% 80%
Fair or worse
Good
Very good
Health status
$100K+
$50K to $100K
Less than $50K
Income
Under-saving (less than 10%)
Under-saving (more than 10%)
On target
High-savers
Saving behavior
DC plan only
DB plan
Plan type
Age 50+
Age 40 – 49
Younger than 40
Age
2013
5353
5858
4747
5656
4848
5454
4646
5959
7272
5858
5252
4747
3333
3333
5454
6363
Note: Based on full-time employees enrolled in a retirement plan. Percentages indicate responses of “agree” or
“strongly agree.”
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
““Only two in five employees believe they can
afford any medical expenses that might arise in
the next 12 months.”

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Insider | March 2014
Employees continue to spend less and
pay down debt
In the aftermath of the financial crisis, many workers
made it a priority to pay off debt, save for retirement
and otherwise exercise more control over their
household budgets. Reducing debt has become
particularly important to workers over the last few
years. In Towers Watson’s 2010 and 2011 surveys,
eliminating debt was the action most frequently
taken after the financial crisis, followed closely by
reassessing retirement savings and reducing daily
spending. More employees are spending less and
postponing big purchases, up from 49% in 2011 to
56% in 2013 (Figure 7).
More employees are reviewing their
retirement savings frequently
Since 2010, employees have become more involved
and interested in retirement planning. Slightly more
than half of all employees review their retirement
plans frequently (Figure 8). Sixty-three percent of
DB plan participants track their savings carefully
compared with 48% of DC-plan-only participants.
Older and midcareer workers report greater
engagement with retirement than younger workers
and saving for retirement is their number one
financial priority (Figure 9, next page).
While many employees worry about future health
care expenses, two in five do not consider how these
costs could reduce their retirement income. Low-
income employees, those in poor health and
under-savers are less likely than others to consider
health care costs in their retirement planning.
Internet and mobile apps have become popular ways
for workers of all ages to track their finances. Older
Figure 7. I have simplified my lifestyle over the last few years by spending less
and delaying major expenditures
0% 10% 20% 30% 40% 50% 60% 70% 80%
Fair or worse
Good
Very good
Health status
$100K+
$50K to $100K
Less than $50K
Income
Under-saving (less than 10%)
Under-saving (more than 10%)
On target
High-savers
Saving behavior
No plan
DB plan
Plan type
Age 50+
Age 40 – 49
Younger than 40
Age
2013
5656
6060
5555
5454
5252
DC plan only
5757
6363
5454
5858
6565
6868
5555
4242
3838
4040
5959
6363
2011
4949
Note: Based on full-time employees enrolled in a retirement plan. “No plan” (n=452) is based on full-time employees.
Percentages indicate responses of “agree” or “strongly agree.”
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
Figure 8. I have reviewed my retirement savings in a lot of detail over the last year
2010 2011 2013
Percentage
point change
2010 – 2013
All 41% 47% 51% +10
Age
Younger than 40 34% 48% 42% +8
40 – 49 36% 44% 50% +14
50+ 47% 48% 61% +14
Plan type
DB plan 45% 54% 63% +18
DC plan only 37% 38% 48% +11
Note: Based on full-time employees enrolled in a retirement plan. Percentages indicate responses of “agree” or
“strongly agree.” Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
““While many employees
worry about future health
care expenses, two in five do
not consider how these costs
could reduce their retirement
income.”

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Insider | March 2014
employees tend to use technology to review
retirement plans, while younger ones use it to track
household budgets and everyday spending (Figure 10).
Overall, 62% of responding workers use mobile apps
to manage their finances and 75% say they are
effective tools.
Could employees save more?
As employees spend more time reviewing their
finances, they have become more aware of gaps
between their savings goals and reality. Sixty percent
of survey respondents acknowledge that they need to
save more if they hope to retire comfortably. This
development has been consistent across all
demographic groups over the last few years. Most
employees — 83% — know their savings fall short of
target amounts, with a 10% gap between what they
should save and what they have managed to put
away (Figure 11). All groups believe they should save
18% of income, but fewer than one in six are there.
Unfortunately, a third of employees do not consider
saving more to be a viable option, and time is
running out for workers nearing retirement. Of the
options available to those who haven’t saved enough
— work longer, save more or live on less in
retirement — 60% of older employees say they would
work longer (Figure 12). Younger employees are
slightly more likely to choose saving more, which
could be an overestimation of their savings capacity.
However, almost half of younger workers consider
delaying retirement to be their best option.
Figure 9. What would you say are currently your top financial priorities?
Younger than 40 Age 40 – 49 Age 50+
1 Housing (60%) Saving for retirement (56%) Saving for retirement (68%)
2 Pay off debts (55%) Pay off debts (49%) Pay off debts (47%)
3 General household costs (54%) Housing (45%) General household costs (44%)
4 General saving (for a “rainy day”) (36%) General household costs (45%) Housing (34%)
5 Saving for retirement (32%) General saving (for a “rainy day”) (37%) General saving (for a “rainy day”) (33%)
6 Leisure and other nonessential spending (19%) To fund children’s expenses (28%) Paying for medical expenses (23%)
Note: Based on full-time employees enrolled in a retirement plan.
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
Figure 10. Do you use the Internet or mobile apps for any of the
following reasons?
Younger
than 40
Age
40 – 49
Age
50+
Track my retirement savings 60% 76% 81%
Compare prices of products to find the best deal 63% 63% 66%
Track my financial investments 55% 65% 66%
Monitor my household spending and budget 65% 48% 40%
Research new investments 32% 39% 38%
Get guidance to improve my financial situation 33% 31% 32%
Note: Based on full-time employees enrolled in a retirement plan who use the Internet or mobile apps to manage their
finances or retirement plans.
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
Figure 11. Considering all your savings (in total, including any retirement
savings), how much of your income do you think you saved last year?
Percentage income saved last year
0%
5%
10%
15%
20%
25%
30%
Below targetOn targetAbove target
Percentage of
full-time
employees
All groups agree
18% is the ideal
savings rate2525
4%4% 13%13% 83%83%
1818
88
Note: Based on full-time employees enrolled in a retirement plan.
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
Figure 12. If someone told you that your income in retirement wouldn’t be as
much as you wanted, which action do you think you would be most likely to take?
0% 20% 40% 60% 80% 100%
Younger than 40
Age 50+
Overall
2113453
60 20 17 3
46 45 7 2
I Work longer I Save more
I Accept lower income in retirement I Do nothing and hope for the best
Note: Based on full-time employees enrolled in a retirement plan.
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
““All groups believe they should
save 18% of income, but fewer
than one in six are there.”

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Insider | March 2014
Delaying retirement is becoming
more common
Many workers expect to fall short on their retirement
savings, and nearly four in 10 plan on working longer
(Figure 13). The number of workers planning to extend
their careers has increased nine percentage points
since 2009. A large majority of these employees
expect to delay retirement by three or more years, and
44% plan on a delay of five years or more (Figure 14).
The profile of those delaying retirement tends toward
the disengaged, less healthy and more stressed
(Figure 13). In fact, more than half (57%) of workers
in poor health and 59% of those reporting high stress
levels have decided to delay retirement.
These results suggest a higher average retirement
age in the future. In 2009, 31% of workers planned on
retiring before age 65 and 41% planned on retiring
after 65 (Figure 15). In 2013, only 25% of workers
planned on retiring before 65 and half expected to
retire after 65. One in three employees either expects
to retire after age 70 or not at all. Moreover, nearly
half (46%) of the workers planning to retire at 70 or
older are in poor health, which suggests “hidden
pensioners” — older workers who continue working
because they cannot afford to retire — on employers’
payrolls in the future with a possible decline in
productivity.4
Conclusion
Employees might be on a firmer financial footing now
than they were in 2009, but many remain unsettled
about their finances and their retirement prospects.
Uncertainty around health care costs and erosion in
the generosity of Social Security and Medicare are
major roadblocks to retirement confidence. Older
workers particularly have yet to regain their former
confidence in their financial futures. Workers without
DB plans and those in ill health are consistently the
most worried about their finances and retirement.
DB plan participants are moderately more secure
and more engaged in reviewing their savings, but they
continue to worry about possible changes to their
plans and cuts to public programs.
Employees are taking steps to address their lingering
worries: spending less, paying down debt and trying
to save more. Internet and mobile apps have emerged
as popular tools to help employees manage their
4
Birchard Wyatt, one of the founders of The Wyatt Company, argued that a worker’s
marginal contribution eventually reaches a peak and then begins declining, eventually
dropping below the compensation cost of keeping him or her on the payroll. He
termed such workers “hidden pensioners.” See Birchard E. Wyatt, “Private Retirement
Plans,” Ph.D. dissertation (Columbia University, New York, 1936), 38.
Figure 13. Has the age at which you plan to retire from full-time employment
changed over the last three years?
0% 20% 40% 60% 80% 100%
2011
2010
2009
36334
40 54 5
39 56 5
2013
43 45 12
I Later I No change I Earlier
+9
Employees who plan to retire later:
Disengaged Low savers Fair/worse
health
High stress
levels
49%49% 51%51% 57%57% 59%59%
Note: Based on full-time employees enrolled in a retirement plan. Responses of “Don’t know” were removed.
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
Figure 14. Approximately how much later do you expect to work?
2009 2010 2011 2013
Percentage
point change:
2009 – 2013
Less than 1 year 0% 1% 1% 0% 0
1 year to less than 2 years 8% 8% 10% 5% –3
2 years to less than 3 years 17% 23% 23% 18% +1
3 years to less than 5 years 22% 27% 24% 27% +5
5 years or more 41% 34% 36% 44% +3
Don’t know 11% 7% 7% 5% -6
Note: Based on full-time employees enrolled in a retirement plan who plan to delay retirement.
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.
Figure 15. At what age do you expect to retire from all full-time employment?
2009 2010 2011 2013
Before age 65 31% 33% 37% 25%
Before 55 4% 2% 3% 1%
55 – 59 9% 9% 11% 6%
60 – 61 7% 8% 10% 9%
62 – 64 11% 14% 12% 9%
Age 65 17% 17% 20% 23%
After age 65 41% 40% 34% 50%
66 – 69 22% 27% 22% 19%
70+ 14% 10% 10% 24%
Never retire 5% 3% 2% 7%
Don’t know 12% 9% 9% 2%
Note: Based on full-time employees enrolled in a retirement plan.
Source: 2013/2014 Global Benefit Attitudes Survey – U.S.

7. Insider | March 2014
Towers Watson is a leading global professional services company that helps organizations improve performance through effective
people, risk and financial management. With more than 14,000 associates around the world, we offer consulting, technology and
solutions in the areas of benefits, talent management, rewards, and risk and capital management.
““Many employees, especially older ones, plan
to delay retirement by five or more years.”
Copyright © 2014 Towers Watson. All rights reserved.
towerswatson.com
household budgets and their financial situations.
Many workers believe they should save more for
retirement and admit they are behind their targets.
However, saving more money is difficult given the
broader economic pressures they face. As a result,
many employees, especially older ones, plan to delay
retirement by five or more years.
The heightened concerns around financial security
represent an opportunity for employers. Specifically,
today’s workforce constitutes a more receptive
audience for employers seeking to educate their
workers about health care costs and reinforce the
value of their retirement programs. The proliferation
of mobile apps also represents an opportunity for
employers to offer retirement planning tools that can
help employees better manage their current finances
and put them on a savings path to a more secure
retirement.
America’s workforce is aging, with older workers
becoming a larger share of the labor market. Many
of these workers have no choice but to delay
retirement, and a significant number are more
stressed, less healthy and less engaged than other
workers, thus posing the risk of hidden pensioners
on payrolls. Employers might want to act to keep
older workers more engaged and to ensure that their
retirement programs are aligned with their workforce.
For comments or questions, contact
Jonathan Gardner at + 44 1737 274097,
jonathan.gardner@towerswatson.com; or
Steve Nyce at + 1 703 258 7573,
steven.nyce@towerswatson.com.